I 108th CONGRESS 2d Session H. R. 3865 IN THE HOUSE OF REPRESENTATIVES February 26, 2004 Mr. Stark introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to deny any deduction for certain gifts and benefits provided to physicians by prescription drug manufacturers.

1.

Short title

This Act may be cited as the &short-title1;.

2.

Findings

The Congress finds that— (1)gifts to physicians from pharmaceutical companies lead to the unnecessary prescribing of prescription drugs, inflating the costs of prescriptions and jeopardizing patient safety, (2)the pharmaceutical industry annually spends $13,000,000,000 promoting and marketing their products, by way of meals, travel subsidies, and other gifts to medical professionals, (3)drug companies annually spend more than $15,000 per physician on such promotions, (4)the present extent of physician-industry interactions appears to adversely affect prescribing and professional behavior and should be further addressed at the level of policy and education, and (5)either redirecting these funds to research or lowering the costs of prescription drugs is a much more needed expenditure by the pharmaceutical industry.

3.

Disallowance of deduction for physician gift expenses of prescription drug manufacturers

(a)

General rule

Part IX of subchapter B of chapter 1 of the Internal Revenue Code of 1986 (relating to items not deductible) is amended by adding at the end the following new section:

280I.

Physician gift expenses of prescription drug manufacturers

(a)

General rule

No deduction shall be allowed under this chapter for any physician gift expense paid or incurred by any prescription drug manufacturer. (b)

Physician gift expense

For purposes of this section, the term physician gift expense means any gift provided directly or indirectly to or for the benefit of a physician, including gifts of meals, sponsored teachings, symposia, and travel, but not including product samples. (c)

Prescription drug manufacturer

For purposes of this section, the term prescription drug manufacturer means— (1)any person engaged in the trade or business of manufacturing or producing any prescription drug, and (2)any person who is a member of an affiliated group which includes a person described in paragraph (1).For purposes of the preceding sentence, the term affiliated group means any affiliated group as defined in section 1504 (determined without regard to paragraphs (3) and (4) of 1504(b)).

. (b)

Clerical amendment

The table of sections for part IX of subchapter B of chapter 1 of such Code is amended by adding at the end thereof the following new item: Sec. 280I. Physician gift expenses of prescription drug manufacturers. (c)

Effective date

The amendments made by this section shall apply to amounts paid or incurred after December 31, 2004.